Originations of adjustable-rate mortgages increased by 40.5 percent from the first quarter of 2017 to the second, according to a new ranking and analysis by Inside Nonconforming Markets. An estimated $59.0 billion of ARMs were originated in the April-June cycle, with a number of major banks and nonbanks posting solid gains. Chase was...[Includes one data table]
Nonprime lenders defended mortgages underwritten with borrowers’ bank statements after criticism of the loans by Fitch Ratings. Steven Schwalb, CEO of Angel Oak Home Loans, a nonprime lender that offers bank-statement mortgages, noted that the loans measure borrowers’ cash flow more precisely than the tax returns used for traditional income verification. “We’re comfortable with the risk of that borrower,” he added, during a panel discussion at the ABS East conference produced by Information Management Network last week in Miami Beach. Bank-statement mortgages account...
Originations of nonprime mortgages in 2017 are the strongest they have been since the financial crisis but remain well below levels seen before then. Lenders are looking to lean on loan originators and borrowers in an effort to increase volume. Angel Oak Companies is on track to originate more than $1.1 billion of non-qualified mortgages this year, according to the firm. The nonbank has three lending units that largely focus on nonprime mortgages and the $1.1 billion in production will be a company record. “Clearly, investors, brokers and consumers are...
Among the major originators of interest-only mortgages, production trends were decidedly mixed in the first half of this year, according to an analysis by Inside Nonconforming Markets. In a group of 12 lenders, six posted lower IO production compared with the first half of last year while some others boosted production significantly. Overall, the lenders originated $6.81 billion in IOs in the first half of 2017, down 19.9 percent from the same period last year. A fair amount of the decline in IO production was driven...[Includes one data table]
Mortgage lenders sold $49.74 billion of high-cost home loans to a variety of secondary market investors last year, according to a new Inside Nonconforming Markets analysis of Home Mortgage Disclosure Act data released late this week. Sales of high-cost mortgages rose 19.1 percent from 2015 to 2016, and accounted for 3.3 percent of total loans sold last year. HMDA reports are required to flag loans with interest rates that exceed the benchmark prime offered rate – basically the rates for Freddie Mac mortgages – as well as loans that are subject to special consumer protections under the Home Owner Equity Protection Act. Sales of HOEPA loans totaled...[Includes one data table]
Wells Fargo recaptured its crown as the leading VA jumbo securitizer, pushing Penny Mac back to second place even as the market dropped further in the second quarter. The volume of VA jumbo loans securitized during the second quarter declined by 5.2 percent from the prior quarter and by 11.8 percent during the first half of 2017 compared to the same period last year. VA jumbo mortgage originations were off by 4.3 percent from the first quarter, according to an analysis by Inside FHA/VA Lending affiliate Inside Mortgage Finance. Agency-jumbo production sagged in the second quarter but the results were not uniform. Fannie Mae production was up 6.5 percent from the prior quarter, while FHA jumbo securitization gained 7.2 percent during the period. At the same time, VA jumbo securitization was down 5.2 percent to $7.4 billion from $7.8 billion, while Freddie Mac saw a hefty 27.8 percent drop in ... [Charts]
A previously obscure FHA program for properties in designated disaster areas is getting more interest from lenders in the wake of hurricanes Harvey and Irma. According to FHA data, there has been a noticeable increase in loans originated under the FHA 203(h) mortgage insurance program, which is designed specifically for hard-hit homeowners in presidentially declared major disaster areas (PDMDA). Origination under the 203(h) program rose from $17.8 million in 2015 to $64.1 million in 2017, data showed. Use of the 203(h) product spiked in the fourth quarter of 2016, when 180 loans totaling $34.0 million were originated, up from 47 in the previous quarter and 26 loans from the same period in 2015. The U.S. experienced more floods in 2016, 19 in all, than any year on record, according to an analysis by Munich Re, a global reinsurance firm. In post-hurricane guidance, FHA urged lenders to ...
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